BMA Says Bermuda Banking Sector Should Open Up To Foreign Competition

by Carla Johnson, Investors Offshore.com

08 July 2002

The Bermuda Monetary Authority (BMA) has suggested that the jurisdiction's banking sector could be opened up to to a greater extent to foreign ventures.

In its annual report, released last week, the Monetary Authority revealed that it has not ruled out the possibility, and that several banking licence applications from foreign operators are currently being considered.

Commenting following the release of the BMA's report, the Royal Gazette said that Finance Minister, Eugene Cox has also given the possibility a 'thumbs up'.

However, the newspaper revealed that there was some opposition to the BMA's suggestion from the jurisdiction's oldest and largest banks, Bank of Butterfield and Bank of Bermuda.

Speaking last week, Bank of Bermuda CEO, Henry Smith told the newspaper that: 'We live on a small island, and we do have concerns about the ability of Bermuda's infrastructure to support many additional competitors.'

However, he stated that he is confident that Bank of Bermuda can compete, and revealed that it has been preparing itself for the eventuality:

'If the expansion is well managed and allows only potential entrants of the highest quality, it should be a positive step in the ongoing development of Bermuda's local banking industry,' Mr Smith concluded.

Also speaking to the Royal Gazette, Bank of Butterfield's new President, Alan Thomspson echoed the Bank of Bermuda chief's words, stating that although he doesn't see the need for any additional foreign service providers as the Bermudian market is already well-served, he is confident that Bank of Butterfield could fend off the competition:

'I look at ourselves and our competitors and think that our set of products is competitive and is up to international standards,' he told the newspaper.

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